Half Yearly Report

RNS Number : 4629M

Edenville Energy PLC

17 September 2012

 



17 September 2012

EDENVILLE ENERGY PLC ("Edenville" or the "Company") (AIM: EDL),

Interim Results for the Six Months Ended 30 June 2012

Edenville Energy plc, the African coal exploration and development company, today announces its unaudited Interim Results for the six months ended 30 June 2012.

Highlights

·     £10,723,788 net assets

·     £319,213 loss

·     £2,283,822 cash

·     £2,500,000 raised in January 2012 to fund drilling programmes at key coal targets and to provide additional working capital

·     Maiden JORC Compliant Resource Estimate for Mkomolo announced in April 2012

o  Resource of 39 million tonnes (39Mt) at an average calorific value of 17 MJ/kg (float density - 2.0 and Yield - 26%)

o  Quality of the coal confirmed as suitable, with appropriate processing, for coal fired power generation

o  Resource within the Rukwa Coalfield project in South Western Tanzania and represents one of Edenville's three known coal deposits on the field

o  First drill targets identified at Muze Basin Drilling to commence in [Q4], once geological mapping and surface sampling of the coal seams and the surrounding rocks is complete

o  Project lies approximately 10km east from the Mkomolo and Namwele deposits

Post period Highlights

·     Drilling continued on Mkomolo with initial results confirming the quality of the coal

·     Initial drilling programme and sampling at Namwele has confirmed the presence of coal bearing strata extending out along strike and occurring at depth.

·     In August 2012, the Company announced that it had exercised its second option on the Rukwa Coalfield project in south western Tanzania, taking interest in two prospecting licences and 66 primary mining licences to 90% with the remaining 10% held by the local partner on the project.

Simon Rollason, Chairman of Edenville, commented:

"The immediate outlook for Edenville is positive as we await full assays from our ongoing drilling campaign at the Rukwa coalfield. The work undertaken during the period allowed us to prepare a carefully selected series of drill targets and I am extremely encouraged that additional coal measures will be intersected further demonstrating our exploration expertise. We shall look to use current drilling results and further exploration work to rapidly deliver an upgraded JORC compliant resource estimation for the Rukwa project. Edenville continues to evaluate its portfolio of assets in Tanzania and will continue to seek new opportunities for company growth through joint participation, partnerships or ownership."

Contact:

Edenville Energy plc
Simon Rollason - Chairman Rakesh Patel - Finance Director www.edenville-energy.com	[phone]
ZAI Corporate Finance Ltd
Marc Cramsie/John Treacy/Charles Laughton	[phone]
Newgate Threadneedle
Graham Herring/Richard Gotla	[phone]

Chairman's Statement

I am pleased to report on the interim results of the Group for the six months ended 30^th June 2012.

Operational Review

The results received from the first 6 months of 2012 have transformed Edenville from an early stage explorer to a company now having an established resource tonnage on its mineral inventory book. The Company has achieved a significant milestone in determining a Maiden JORC compliant resource at Mkomolo in April 2012 which it aims to upgrade and expand during the next 12 months. The JORC compliant resource published in April, prepared by the consulting group, Wardell Armstrong International ("WAI"), at the Mkomolo Basin on the Rukwa Coalfield project in South Western Tanzania has the following highlights:

·     Maiden inferred JORC compliant Mkomolo resource of 39 million tonnes (39Mt) at an average calorific value of 17 MJ/kg (float density - 2.0 and Yield - 26%)

·     Phase 1 drilling at Mkomolo covered a strike length of approximately 6km

·     Mkomolo remains open to the north, potentially for a further 3.5 km, and down dip.

·     The Mkomolo Basin on the Rukwa Coalfield, represents one of Edenville's three known coal deposits on the field

The results of the Maiden JORC-compliant resource estimate for the Mkomolo portion of the Rukwa Coalfield highlights the positive potential of the project. Historical estimates for Mkomolo were just 2.5Mt of coal; to date we have delineated 39Mt of inferred resource. Edenville has now confirmed the presence of coal bearing strata along multiple kilometres of strike length, which also extends to a significant depth. Importantly, drilling further confirmed the quality of the coal as suitable, with appropriate processing, for coal fired power generation.

The objective of the remaining 2012 drill programme will be to delineate these extensions to the known Mkomolo coal seams and also test the Muze and Namwele deposits. To support this, the company has engaged Sound Mining Solutions Ltd. ("SMS") of South Africa, to supervise the on-site works and to report on the upgradede resource once all laboratory results have been received. The Company has also engaged Geoline Services Ltd to undertake downhole geophysical surveys of some holes drilled in 2011 and from holes accessible during the 2012 programme. This data will allow for better cross correlation of the coal seams between drillholes.

In May 2012 the Company announced the commencement of the 2012 drilling programme with the drill rig mobilising to site. The objective of the drilling programme is to upgrade and expand the current maiden Inferred Resource at Mkomolo of 39 Million tonnes to a JORC compliant Measured and Indicated resource, in addition to drilling at the Namwele deposit and commencing drilling at the Muze portion of the Rukwa Coalfield Project in South Western Tanzania.

During the reporting period we announced the initial rock sample results from the first set of sampling carried out at the Muze Basin. The Muze project lies approximately 10km east from the Mkomolo and Namwele deposits. The results indicated that the Gross Calorific Values

("C.V") of the coal mineralisation are similar to the Mkomolo and Namwele deposits and classed as sub-bituminous thermal coal, which would be suitable for thermal power generation. The Muze area has a historical, non-JORC compliant resource of 60 million tonnes and is scheduled for initial drilling later this year, once the geological mapping and surface sampling of the coal seams and the surrounding rocks is complete.

Financing

In January 2012, Edenville successfully completed a share placing of 1 billion new ordinary shares in the Company to raise £2.5 million. The Placing proceeds are to fund the proposed 2012 drill programme at the Company's Rukwa coal project in southern Tanzania, which is planned to evaluate coal mineralisation along strike from the area drilled in 2011 and also to test the down-dip depth extension of the intersections reported last year.

Financial Results

The Company made a loss after taxation for the six month period ended 30 June 2012 of £319,123 and had net assets at that date of £10,723,788.

The total comprehensive loss for the period was £410,273 which included a loss of £91,150 arising of the translation on the Tanzanian subsidiary company accounts from US Dollars to Sterling.

At 30 June 2012, the Company had cash reserves of £2,283,822.

Post Balance Sheet Events

In July 2012, the Company announced the receipt of all the outstanding remaining drill results from the 2011 drill programme at Namwele, Tanzania. The Namwele Project lies 4km to the south east of the Mkomolo Deposit. Namwele hosts an old open pit mine which was previously worked on a small scale providing lump coal to industries located at Mbeya, some 300km to the south by road. In late 2011 Edenville drilled eight vertical diamond drill holes close to the Namwele open pit and out along strike of the coal mineralisation. In total, 869.80 metres were drilled covering a strike length of 2.2 kilometres.

The initial drill programme and sampling at Namwele has confirmed the presence of coal bearing strata extending out along strike from the previous workings and occurring at depth. These results will provide the basis for follow-up drilling during the second half of 2012 which will enable a JORC compliant resource to be estimated for Namwele.

In August 2012, the Company announced that it had exercised its second option on the Rukwa Coalfield project in south western Tanzania, taking our interest in two prospecting licences ("PL") and 66 primary mining licences ("PML") to 90% with the remaining 10% held by the local partner on the project.

Outlook

The outlook for the Company remains very positive. We now have our maiden resource statement which we fully expect to be upgraded and expanded once the current drill programme is complete and all sample results received. The current resource is based on part of the Mkomolo Deposit, which represents only one of the three known coal deposits on the Rukwa Coalfield, held under licence by the Company. During the remainder of this year we will initiate drilling at Muze and complete additional work at Namwele to allow for JORC compliant resource estimates to be made for both deposits. Through the share placement that was completed at the beginning of the year we remain funded to complete our current programme of works. The results from the Rukwa project to date are very encouraging and demonstrate the presence of coal of a quality with appropriate processing suitable for domestic use and power generation. The predicted demand for electricity in the southern African region, particularly Tanzania, bodes well for the development of the project.

Simon Rollason

Chairman

17 September 2012

EDENVILLE ENERGY PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

		Six months ended 30 June 12	Six months ended 30 June 11	Year ended 31 Dec 11
		Unaudited	Unaudited	Audited
	Note	£	£	£
Gross profit		-	-	-
Administrative expenses		(273,691)	(234,188)	(511,315)
Share based payments		(45,437)	(108,421)	(259,028)
Impairment of available for sale equity investments		-	-	(446,428)
Group operating loss		(319,128)	(342,609)	(1,216,771)
Finance income		5	-	4
Loss on operations before taxation		(319,123)	(342,609)	(1,216,767)
Taxation		-	-	-
Loss for the period after taxation		(319,123)	(342,609)	(1,216,767)
Other comprehensive income:
Loss on translation of overseas subsidiary		(91,150)	(326,753)	27,839
Total comprehensive loss for the period		(410,273)	(669,362)	(1,188,928)
Attributable to:
Equity holders of the Company		(410,220)	(669,349)	(1,118,476)
Non controlling interest		(53)	(13)	(452)
		(410,273)	(669,362)	1,118,928
Loss per share
- basic and diluted (pence)	2	(0.007)	(0.010)	(0.040)

The loss for the period arises from the Group's continuing operations.

EDENVILLE ENERGY PLC

CONSOLIDATED statement of financial position

as at 30 june 2012

		As at 30 June 12	As at 30 June 11	As at 31 Dec 11
		Unaudited	Unaudited	Audited
	Note	£	£	£
Non-current assets
Property, plant and equipment		80,760	20,722	17,762
Intangible assets	4	9,541,191	8,309,203	9,454,607
Equity investments - available for sale		-	446,428	-
		9,621,951	8,776,353	9,472,369
Current assets
Trade and other receivables		164,242	31,324	104,324
Cash and cash equivalents		2,283,822	1,561,958	511,538
		2,448,064	1,593,282	615,862
Current liabilities
Trade and other payables		71,424	75,865	117,212
Current assets less current liabilities		2,376,640	1,517,417	498,650
Total assets less current liabilities		11,998,591	10,293,770	9,971,019
Non -current liabilities
Provisions for other liabilities and charges		(1,274,803)	(1,242,711)	(1,288,162)
		10,723,788	9,051,059	8,682,857
Capital and reserves
Called-up share capital	5	940,588	740,588	740,588
Share premium account		11,913,686	9,707,686	9,707,686
Share based payment reserve		335,344	139,299	289,907
Foreign currency translation reserve		(328,584)	(592,026)	(237,434)
Retained earnings		(2,158,015)	(965,069)	(1,838,945)
Issued capital and reserves attributable to owners of the parent company		10,703,019	9,030,478	8,661,802
Non-controlling interest		20,769	20,581	21,055
Total equity		10,723,788	9,051,059	8,682,857

EDENVILLE ENERGY PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2012

Equity Interests
	Share capital	Share premium	Retained Earnings	Share option reserve	Foreign currency translation reserve	Total	Non- Controlling interest	Total
	£	£	£	£	£	£	£	£
Balance at 1 January 2012	740,588	9,707,686	(1,838,945)	289,907	(237,434)	8,661,802	21,055	8,682,857
Issue of share capital	200,000	2,300,000	-	-	-	2,500,000	-	2,500,000
Share issue costs	-	(94,000)	-	-	-	(94,000)	-	(94,000)
Share based payment charge	-	-	-	45,437	-	45,437	-	45,437
Minority interest on fair value adjustment	-	-	-	-	-	-	(223)	(223)
Other reserves	-	-	-	-	-	-	(10)	(10)
Foreign currency translation	-	-	-	-	(91,150)	(91,150)	-	(91,150)
Total comprehensive loss for the period	-	-	(319,070)	-	-	(319,070)	(53)	(319,123)
Balance at 30 June 2012	940,588	11,913,686	(2,158,015)	335,344	(328,584)	10,703,019	20,769	10,723,788
Balance at 1 January 2011	658,922	8,224,353	(644,367)	52,616	(265,273)	8,026,251	38	8,026,289
Issue of share capital	81,666	1,483,333				1,564,999	-	1,564,999
Transfer on exercise of options and warrants	-	-	21,738	(21,738)	-	-	-	-
Share based payment charge	-	-	-	108,421	-	108,421	-	108,421
Fair value adjustment	-	-	-	-	-		20,712	20,712
Other reserves	-	-	156	-		156	(156)	-
Total comprehensive loss for the period	-	-	(342,596)	-	(326,753)	(669,349)	(13)	(669,362)
Balance at 30 June 2011	740,588	9,707,686	(965,069)	139,299	(592,026)	9,030,478	20,581	9,051,059
Balance at 1 January 2011	658,922	8,224,353	(644,367)	52,616	(265,273)	8,026,251	38	8,026,289
Issue of share capital	81,666	1,483,333	-	-	-	1,564,999	-	1,564,999
Transfer on exercise of warrants	-	-	21,737	(21,737)	-	-	-	-
Minority interest on fair value adjustment	-	-	-	-	-	-	21,469	21,469
Share based payment charge	-	-	-	259,028	-	259,028	-	259,028
Foreign currency translation	-	-	-	-	27,839	27,839	-	27,839
Total comprehensive loss for the year	-	-	(1,216,315)	-	-	(1,216,315)	(452)	(1,216,767)
Balance at 31 December 2011	740,588	9,707,686	(1,838,945)	289,907	(237,434)	8,661,802	21,055	8,682,857

EDENVILLE ENERGY PLC

consolidated CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2012

	Six months ended 30 June 12	Six months ended 30 June 11	Year  ended 31 Dec 11
	Unaudited	Unaudited	Audited
	£	£	£
Cash flows from operating activities
Operating loss	(319,128)	(342,609)	(1,216,771)
Impairment of tangible & intangible non-current assets	-	-	482,964
Depreciation	2,220	2,959	5,921
Share based payments	45,437	108,421	259,028
Foreign exchange loss	(5,978)	-	(89,245)
Increase in trade and other receivables	(60,538)	(19,749)	(50,445)
Decrease in trade and other payables	(44,492)	(94,766)	(35,344)
Net cash from operating activities	(382,479)	(345,744)	(643,892)
Cash flows from investing activities
Purchase of exploration and evaluation assets	(187,137)	(282,641)	(1,034,890)
Purchase of fixed assets	(64,587)	-	-
Finance income	5	-	4
Net cash used in investing activities	(251,719)	(282,641)	(1,034,886)
Cash flows from financing activities
Proceeds on issue of shares	2,500,000	1,564,999	1,564,999
Share issue costs	(94,000)	-	-
Net cash generated in from financing activities	2,406,000	1,564,999	1,564,999
Net increase in cash and cash equivalents	1,771,802	936,614	(113,779)
Cash and cash equivalents at beginning of year	511,538	625,639	625,639
Exchange losses on cash and cash equivalents	482	(295)	(322)
Cash and cash equivalents at end of year	2,283,822	1,561,958	511,538

EDENVILLE ENERGY PLC

NOTES TO THE INTERIM REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2012

1.       Financial information and basis of preparation

The interim financial statements of Edenville Energy Plc are unaudited consolidated financial statements for the six months ended 30 June 2012 which have been prepared in accordance with IFRSs as adopted by the European Union.  They include unaudited comparatives for the six months ended 30 June 2011 together with audited comparatives for the year ended 31 December 2011.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2011, as described in those financial statements.

The interim financial statements do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The statutory accounts for the year ended 31 December 2011 have been reported on by the company's auditors and have been filed with the Registrar of Companies.  The report of the auditors was unqualified and did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2012:

·     IFRS 7  Financial Instruments Disclosure - Amendments enhancing disclosures about    transfers of financial assets

·     IAS12   Income taxes - Limited scope amendment (recovery of underlying assets)

The adoption of these standards has not had a material effect on the financial statements of the group.

2.       Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

	30 June 12	30 June 11	31 December 11
	£	£	£
Loss after taxation	(319,123)	(342,609)	(1,216,767)
The weighted average number of shares in the period were
Basic ordinary shares	4,281,381,240	3,421,821,619	3,578,852,211
Basic and diluted loss per share (pence)	(0.007)	(0.010)	(0.040)

The loss attributable to equity shareholders and weighted average number of ordinary shares for the purposes of calculating diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share. This is because the exercise of share options and warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.

3.   Dividends

No dividends are proposed for the six months ended 30 June 2012 (six months ended 30 June 2011 £nil: year ended 31 December 2011 £nil).

4.       Intangible  assets

	Exploration and evaluation assets
	Javan Licences	Tanzanian Licences	Goodwill	Total
	£	£	£	£
Cost or valuation As at 1 January 2012	36,536	8,144,976	1,309,631	9,491,143
Additions	-	187,137	-	187,137
Fair value adjustment	-	-	(223)	(223)
Foreign exchange differences	-	(86,971)	(13,359)	(100,330)
At 31 June  2012	36,536	8,245,142	1,296,049	9,577,727
Accumulated amortisation and impairment
As at 1 January 2012	36,536	-	-	36,536
Impairment charge	-	-	-	-
As at 30 June 2012	36,536	-	-	36,536
Net book value
As at 30 June 2012	-	8,245,142	1,296,049	9,541,191

4.             Intangible  assets (continued)

	Exploration and evaluation assets
	Javan Licences	Tanzanian Licences	Goodwill	Total
	£	£	£	£
Cost or valuation As at 1 January 2011	36,536	7,061,646	1,286,890	8,385,072
Additions	-	285,199	20,712	305,911
Foreign exchange differences	-	(337,601)	(44,179)	(381,780)
At 30 June 2011	36,536	7,009,244	1,263,423	8,309,203

	Exploration and evaluation assets
	Javan Licences	Tanzanian Licences	Goodwill	Total
	£	£	£	£
Cost or valuation As at 1 January 2011	36,536	7,061,646	1,286,890	8,385,072
Additions	-	1,073,913	21,469	1,095,382
Foreign exchange adjustment	-	9,417	1,272	10,689
At 31 December 2011	36,536	8,144,976	1,309,631	9,491,143
Accumulated amortisation and impairment
As at 1 January 2011	-	-	-	-
Impairment charge	36,536	-	-	36,536
As at 31 December 2011	36,536	-	-	36,536
Net book value
As at 31 December 2011	-	8,144,976	1,309,631	9,454,607

The outcome of ongoing exploration and evaluation, and therefore whether the carrying value of exploration and evaluation assets will ultimately be recovered, is inherently uncertain.  The directors have assessed the value of exploration and evaluation expenditure carried as intangible assets.  In their opinion there has been no impairment loss to intangible exploration and evaluation assets in the period.

5.       Share capital

		No.	£
30 June 2012
Allotted, called up and fully paid
Ordinary shares of 0.02p each		4,446,216,405	889,244
Deferred shares of 0.08p each		64,179,932	51,344
			940,588
30 June 2011
Allotted, called up and fully paid
Ordinary shares of 0.02p each		3,446,216,405	689,244
Deferred shares of 0.08p each		64,179,932	51,344
			740,588
31 December 2010
Allotted, called up and fully paid
Ordinary shares of 0.02p each		3,446,216,405	689,244
Deferred shares of 0.08p each		64,179,932	51,344
			740,588

On 31 January 2012, the company issued for cash 1,000,000,000 ordinary shares of 0.02p each at 0.25p per share.

6.       Distribution on interim report to shareholders

The interim report will be available for inspection by the public at the registered office of the company during normal business hours on any weekday and from the Company's website http://www.edenville-energy.com/. Further copies are available on request.

 

END

 

 

IR GGUGABUPPGAM